what gives you an edge?

Hi

Trying to impose discipline in my trading i did the following:

I impose three rules to myself:

1. I can enter the trade only if one of my 2 setups occur

2. I must check the economic calendar for the news before to place the trade

3. I must place an order with predetermined entry, stop loss and take profit

On peace of paper, I make check boxes, and I must check that I perform those three tasks, BEFORE to place the order.

I believe that those three things give me some edge over other traders, and I filter some bad trades, since many times my order is not filled, and I cancel the order (price goes in opposite direction)

Any of you use such check list before to place the trade? What do you have on your list?

What gives you an edge? Any idea what I should add to this list?

Also, I would like to mention that since I start to implement those three rules, my trading improve dramatically. So goal of this post would be to add some more rules in attempt to improve my trading and to give him a treatment as any other business.

Regards, Zoreli

Interestingly I used this a lot but not so much recently. Partly because when you back test it is very difficult to include the calandar events...

As far as edge, Time is the big thing for me. Never give up.
Merlin is also spot on imo in stating that you should look at the charts as if you don't have a position. This is critical and has saved me many times both in getting out of losing trades and gritting my teeth when I know I am right (win or lose).
Third, keep your greed / fear response (that we all have) to a minimum by trading to a position size you are comfortable to lose. This, for me at least, may change from day to day depending on the market and recent trading performance.
Lastly, looking back at both demo and live trades I find that I have my biggest losses when the market changes from trending to ranging or the reverse. These (for me at least) are traded differently.

Have fun on the road, it is as important as the destination.

Hi Marrethiel

You are right about this. I didn't include it in my list, because I solved that problem in my trading earlier.

Those who did not, it may add it as rule no.4

Regards, Zoreli

IMHO, Fixed TP can be a injurious to your account!
It is important to see the Price movement at ' That Time ' and TP then becomes flexible, like after my entry, I see markets like Roadways. If they are clearer , I increase my car speed and if much traffic decrease the speed, if too much traffic may be I will walk out of position. It all really depends on the Market situation at that time.

Point 4- though very very simple and overlooked but extremely powerful
Before you place a buy / sell order , just check whether you are buying on resistance of HTF or selling on support of HTF! If so...Beware

Looking behind the chart and tracking the big guys who move the market.
Trading the same direction and profiting from it.

The most powerful ingredient for the edge is to always think of the risk we are taking and be willing to reduce it based on facts that the market is giving instead of thinking how much I could have won. I believe this mindset helps to keep our rules intact and even develop new ones based on purpose of risk reducing but not on our greed or fear of loosing. Just reduce the risk and let the market take care of the rest.

Hi oneuniverse

I try to leave the take profit level open, but it didn't worked for me. Price retrace, and I tend to get out on the worst possible place.

Somehow it is against my character I guess. I like consistency better. I prefer SL and TP to be in place, and if the TP is hit, let it be. Same is true for the SL.

For me, that works better, I don't know for other people.

Regards, Zoreli

I suggest you add this one in:-
only take a trade if the risk reward ratio is at least 1:1

personally I'd take out the rule about news because I found it to be very random. However since I do mot know ur strategy I won't comment that strongly.

But the one about risk reward ratio... you better put it somewhere near the top of you list

trading with the trend? I've heard that sometimes can be helpful....lol

I agree with you, I think having TP open is for very professional guys and it is killer for most of traders.

Well, this is definitely good rule to have it on the list.

Why I don't have it on my list? Here is the explanation:

I place rules to solve problems that I have in my trading. I don't have problem with the risk & reward ratio.

I have problem with my entries and I was burned by the news too many times. That's why one of my rules is to check for the news on economic calendar BEFORE to enter the order.


Also, I had problem with random trading. So, I select two setups that work for me best, and from now on, I must check the check box that one of my 2 setups occur.

Finally, I had problem with filtering my entries. Many times happen the following scenario: As soon as I enter the trade, price would start to go in the opposite direction. To solve this problem, I decide to place orders for my entries. That is I place the order and if the price reach certain level I am in the trade with chance that price will continue to go in my direction.

No , doesn't work always, but it DID save me a ton of money, since without order I would enter the trade, and I will take a loss, and now many times, I never get filled, so I preserve many bad trades now.

Point of this post is to help to my self, introducing new rules to my list, and other people to create their own list, based on their trading style. But the truth is, if you do have a list, you will improve your trading.

Regards, Zoreli

mostly a cliche, but add to your winners.